HIX Preparation: First Things First—Architecture

As the market responds to the Affordable Care Act, group and voluntary benefit insurers must externalize IT architecture, billing and enrollment systems to be successful with and in health insurance exchanges, according to study.

Insurance Networking News, March 15, 2013

Carrie Burns

As insurers face the changing health market that includes state health insurance exchanges, they will need to re-examine their distribution and service partners in order to meet new regulatory and cost challenges. And, through discussions with group and voluntary insurers, Celent says their immediate IT concern is billing and enrollment, in that order, with customer/broker service portals and policy administration an important but longer-term concern. But, Celent says, first and foremost, insurers need to prepare aged, legacy platforms to support different business models across multiple market segments, alternative distribution models and emerging modern front- and back-office applications that are based on leading-edge technology.

The research and consulting firm’s report, “US Group and Voluntary Employee Benefits 2013,” contends that many companies are also concerned with master data management and business process management as they prepare to deploy longer-term, evolutionary IT strategies that will require data and process orchestration between old, new, internal and external systems.

"As the group and voluntary insurance markets converge, changing distribution and service models will strain IT application architectures and legacy systems past the breaking point," says Chuck Johnston, Director, Americas Life/Annuity & Group Practice with Celent's Insurance Group and author of the report. "Insurers and brokers have underinvested in group and voluntary insurance solutions over the last 20+ years, and will struggle to meet new market requirements."

To get there, Celent contends “insurance IT leadership must develop open application and technology architectures that will support multiple business process patterns including ‘Benefit Malls,’ governmental and independent electronic exchanges, and a shrinking and evolving broker/consultant network.” This support must extend to big data and social media implementation strategies as well as the core systems needs.